BlackRock Inc.'s Rick Rieder said last month's surprise contraction in payrolls reflects a "productivity revolution" rather than economic weakness. He argues the U.S. economy remains on track for 6% nominal growth in gross domestic product even as hiring stalls.

Rieder, chief investment officer of global fixed income at BlackRock, suggests that artificial intelligence is driving efficiency gains that allow companies to produce more with fewer workers. This shift, he contends, is a positive development that should not be misread as a sign of an impending recession.

The payroll decline, which caught many economists off guard, is seen by Rieder as a temporary distortion caused by companies leveraging new technologies to optimize operations. He emphasizes that productivity gains are a key driver of long-term economic growth, potentially offsetting the drag from slower job creation.

Despite the mixed labor market signals, Rieder remains optimistic about the overall economic trajectory. He points to resilient consumer spending and robust corporate investment in AI as factors supporting his forecast of 6% nominal GDP growth. This outlook suggests that the economy can continue expanding even as the labor market cools, a scenario that could influence Federal Reserve policy decisions in the coming months.